Features - Cover Story

Arriving on the heels of a glob- al financial crisis, the year 2009 would not strike most observers as the ideal time to start a business. Nonetheless, Michael Eisner drew upon his two decades of scrap industry experience to start Premier Metal Services LLC, Solon, Ohio, at that time. Eisner has subsequently built a small team of dedicated colleagues and has helped guide the company into a growing scrap brokerage and services provider.

A visitor to the Premier Metal offices in the summer of 2014 would see all the telltale signs of an active and hectic trading and logistics nerve center: multiple monitors displaying global metals market information; whiteboards tracking daily tasks and freight priorities; one or more employees on the phone or speaking into a Bluetooth device at any given time; and paper invoices, faxes and other printouts kept in (mostly) organized stacks on desks, in trays and on counters.

Five years after founding Premier Metals, Eisner says he is thankful for the support of his family, employees, suppliers, consumers, processing partners, traders and advisors. All of them, he says, are jointly responsible for helping establish Premier Metals as a firm engaged in trading and service operations with a national and global reach.

Full-time student

Upon graduating from college, Eisner’s first job was not in the scrap industry but instead involved computer programming for industrial radio frequency applications, he says.

His opportunity to shift into the scrap industry came when a fellow Toledo, Ohio, area B’Nai B’rith softball player named Brad Finkel urged him to apply for a job opening at OmniSource Corp.

In the aftermath of a meltdown

The nonferrous scrap industry experienced a meltdown in 2008 in the wake of a global banking crisis that resulted in cancelled and severely renegotiated contracts. Three years later, the sector was hit again, this time by the sudden bankruptcy of New York-based commodities and derivatives trading house MF Global.

Michael Eisner of Premier Metal Services LLC, Solon, Ohio, acknowledges he was among the parties harmed by the sudden bankruptcy of MF Global. In the wake of the event, he spent considerable effort and raised his voice to help make sure scrap traders who hedge would be better protected in the future.

“When MF Global went down, I saw a lot of things that weren’t right about the terms and conditions with futures commissions merchants (FCMs). We decided to become proactive and met with the U.S. Commodity Futures Trading Commission (CFTC),” recalls Eisner.

Subsequently, he says, “We were successful in getting a lot of things changed. Mark Weintraub did a great job with it,” he says of his current Premier Metal colleague, who at that time was a lawyer with the Cleveland office of Thompson Hine LLP.

“We hedge strictly for risk management, not to make money. The way things were set up, the money we had on account was at risk when it shouldn’t have been,” Eisner says. “The changes are for the better, but to enact those changes we had to involve the CFTC, several U.S. senators and congressmen.”

While traders now have more protection in this specific instance, Eisner is skeptical that the trading community has fully learned its lesson from the 2008 and 2011 events.

“People have short memories,” Eisner says. “Asia is setting up like it did before, and people are doing exactly what they said they would never do again as far as credit terms. Another bad event is going to happen, it’s just a matter of when.”

The Fort Wayne, Indiana, scrap company had operations in Toledo and Fort Wayne at that time, and Eisner ended up being offered and accepting the position. “I started in traffic management in Toledo and Fort Wayne, and it was the single best type of experience,” Eisner says.

His colleagues and his exposure to operations helped convince him that there was much to be learned about the scrap industry at the yard and plant levels. “You’ve got to spend at least three years out in operations,” he states.

Eisner says this initial exposure, followed by his ongoing priority to visit yards, plants, mills and foundries at every opportunity, has been a critical factor in becoming a more complete trader. “To visit accounts and know what you’re talking about is totally different from just trying to sell a product.”

Several years into his OmniSource tenure, Eisner got married and began making plans to move back to his native Cleveland area. While in Cleveland to interview with ingot maker I. Schumann & Co., his contact there recommended he visit nonferrous processing and trading firm Conversion Resources.

That company proved to be the better fit, and Eisner was soon assigned to a scrap procurement role. “I was buying for the company’s copper refinery in Warrenton, Missouri, and my book was west of the Mississippi River,” he recalls. “I spent between two and three years there and really learned a lot, engaging in hedging and LME (London Metal Exchange) and COMEX DTN (data transmission network) communication.”

Eisner next moved to another Cleveland area company, where he helped build its trading and hedging business and spent several more years gathering additional red metals industry knowledge.

By early 2009 Eisner says he was ready to pursue his long-term goal of starting his own business, and in May 2009 he set up the legal, accounting and office infrastructure for a firm that was without a name until his attorney suggested the word “premier” as a viable option.

That month Eisner engaged in a whirlwind of activity that included meetings and contract signings with his attorney, banker and accountant, as well as with his brother Stuart Eisner, who he credits for donating a laptop to help him get started. Eisner says he quickly purchased software from ScrapWare Corp., Rockville, Maryland, to help organize what he hoped would be a growing book of business.

Eisner’s brother also was among a chorus of voices (joining his accountant and banker) who advised him to hold off on his initial desire to run a physical plant. “My accountant asked me that afternoon, ‘Why do you want to do that?’

“It was what I thought I was supposed to do,” recalls Eisner. “But that very first day I realized I really didn’t want to have that overhead.”

Subsequently, Premier Metal Services has focused on using Eisner’s and his colleagues’ knowledge and commitment to service to build a company that provides value to scrap generators, processors and consumers without the need for a physical plant.

Beyond the basics

Scrap trading on its surface involves the ability to sell a load of materials to a willing buyer for a price that ideally allows the seller to profit and the buyer to be able to process or melt the material while maintaining a profit margin.

Eisner acknowledges these basics are always in play but adds that he is a firm believer that a successful trader also can provide a great deal more, with the additional services contingent on a deep knowledge of the metals industry and strict attention to detail.

“I try to visit all my suppliers and consumers. You never know what you’re going to pick up on when you’re there,” he comments. “Anybody can walk through a plant or a consumer facility, but it’s another thing to learn the chemistry tolerances or how the plants work. You’ve got to provide value added in what we’re doing. We have to be detail oriented and anticipate for our supplier and consumer any potential pitfalls.”

He looks back at his operations experience as critical in this endeavor. “I supervised in all areas of nonferrous plant life, including both a union and nonunion environment. I learned what it takes to sort material and make acceptable packages that the mill can use. I supervised a lead smelting furnace, worked on a wire chopper and oversaw the operations of a scrap processing facility. The best experience was running the scale and dispatching trucks, as this is the nerve center of any operation,” says Eisner.

In addition to knowledge, such experiences also helped him cultivate the desirable trait of empathy. “It’s a piece of advice I received early on: Don’t ever ask someone to do something you haven’t done yourself. You may not do it as well, but you have to have an appreciation for things like changing the blades on a granulator.”

Regarding the current activities of Premier Metal Services, Eisner is quick to point out that brokerage is just a part of the overall picture. “You can’t just buy and sell metals. I’m processing aluminum and setting up partnerships throughout the country where I subcontract with current suppliers to do the processing. We take physical possession and track it and then sell it,” he says.

Upgrading material and finding the best home for it in terms of metallurgical chemistry allows Premier to move beyond a “quarter-penny-on-the-pound” trading mentality. “One of our strong points is treating people fairly and helping them to solve their problems,” says Eisner. “Then the business model becomes not just price. There is more to it then picking up the phone and moving it from A to B. What happens if that metal gets rejected or if someone’s specs change? That’s when service becomes critical.”

In an industry where transactions can involve large sums of money and can hit bumps in the road, Eisner says intangible qualities also are important to Premier’s ability to service its customers. First and foremost, he says, “Just be honest with people. They know we have to make something, and we will tell suppliers where our sales price is. If there is a claim, you’ve got to look at the numbers and understand it.

No shortage of mentors

Michael Eisner, owner of Premier Metal Services LLC, Solon, Ohio, and his long-time friend and current trading colleague, Mark Weintraub, point to a string of scrap industry mentors they have encountered along their career paths.

Eisner’s first job in the scrap industry was with OmniSource Corp., Fort Wayne, Indiana, where his friend Brad Finkel helped recruit him and train him. Eisner says he also learned a lot from the Rifkin family, who owned OmniSource at that time.

Later stops in Eisner’s career included Conversion Resources in Cleveland, where he says he “learned all sorts of things about mark to market, hedging, trading positions and dealing with people” from Ralph Razinger. Also at Conversion Resources, Eisner says Tom Yancy taught him “that you can choose who you do business with” when it comes to untrustworthy or unpleasant customers.

Weintraub started his scrap education learning about his great-grandfather’s scrap yard in Lancaster, Ohio. He also helped his father run General Auto Wrecking in Akron, Ohio, until the mid-1980s.

Weintraub continued his scrap metal career at Columbia Iron & Metal, Cleveland, and is still grateful to David Miller for the opportunity. Weintraub worked at Columbia’s former Cleveland processing yard, the Atlas Lederer Co., where, he says, “I learned a tremendous amount of valuable information from Leonard Abrams, including that you have to come to work every day expecting something to go wrong. If you have that mindset, it’s a lot easier to deal with those issues.”

Weintraub learned about copper and brass from David Nagusky and Rik Kohn at The Federal Metal Co., Bedford, Ohio, while working there. He also learned from competitors in that sector, such as Pat Boyle of H. Kramer & Co., Chicago.

“This business is problem solving,” he continues. “It’s a dance. You have to figure out where material fits. That’s what separates us. We never say ‘It’s rejected, take it back.’ I’ll travel all over the world to look at and consider the rejected loads.”

Communication is another key intangible. “In building this business, when we ran into an issue we listened to our customers and created systems, which included achieving our ISO 9001:2008 certification in 2011, to prevent problems from happening in the future,” Eisner says. “There is nothing worse than being in a plant waiting for a truck, and no one communicates to you whether it’s coming or not. We might over-communicate about this stuff, but we’d rather do that.”

The addition of Jill Reagan as a logistics coordinator in January 2014 has helped Premier pay additional attention to the freight aspects of the business. “Reacting to suppliers or customers who need to receive metal or move product off the floor quickly” is a critical service component, says Reagan.

In all transactions, the trust factor in scrap trading is difficult to underestimate, notes Eisner. “This can be the only industry in the world where you’re shipping a $150,000 order and there are no papers signed,” he adds.

Feverish pace

As Premier Metals’ customer base and volume of traded materials has grown, Eisner has been able to move beyond the methods he established during his first year in business.

In 2009, Eisner’s wife, LeAnne, provided office management support, though she also needed to spend considerable time with their two children, as Eisner acknowledges he was largely absent from home that year. “LeAnne and I look back at that first year and call it the best of times and worst of times,” Eisner says.

“It was thrilling—I was doing what I always wanted to do, and my wife was very supportive. But we had a 2-year-old and a 10-year-old at home. I lost a year with my family, but I wanted to do it all myself to learn. It always felt right when I did it—it’s not like there was pressure. But I was working seven days a week.”

The unsustainable schedule has been alleviated with the hiring of three employees in the ensuing years: Reagan, logistics coordinator; Stacy Campbell, office manager; and, in 2012, Mark Weintraub, trader and in-house counsel.

Weintraub is a fourth-generation scrap industry veteran whose recycling career was put on hiatus when he spent seven-plus years practicing commercial bankruptcy law at a Cleveland-based law firm. Weintraub had attended law school at night while working full-time at The Federal Metal Co., Bedford, Ohio.

Weintraub and Eisner had been friends since the early 1990s, when they both briefly lived in Toledo. After both returned to Cleveland for other positions, their friendship and business relationship grew. In late 2011, they again crossed paths for a very much unwanted reason—the sudden bankruptcy of New York-based commodities trading company MF Global.

The duo worked together with the Institute of Scrap Recycling Industries Inc. (ISRI), the Commodity Futures Trading Commission (CFTC) and several U.S. senators to effect major changes in the commodities trading sector. (See the sidebar “In the aftermath of a meltdown” on page 42.)

As they spent time together, Eisner made it clear to Weintraub that he would be welcome to join Premier Metal, not knowing that Weintraub was in fact considering the possibility of coming back into the scrap business.

When working on the MF Global case, Weintraub says, “I was a little nervous after being out of the scrap business for eight years, but when I reached out to speak to friends in the business, it was like I never left. Michael was very persistent, and at the same time I was reconnecting with the scrap industry I was reflecting whether I wanted to spend the rest of my work life practicing law.”

Weintraub joined with Eisner at Premier Metal in 2012 and says he is glad to be back in the scrap industry. “Certainly the relationships are a significant reason; I have made life-long friends in the scrap industry,” he says. “Plus, this business requires a lot of creativity. I’ve always found that very stimulating. Whether you’re buying or selling, you have to be creative about how you’re marketing metal so it will maximize opportunities for suppliers and consumers. And the industry is constantly changing, so you continue to learn and face new challenges.”

Weintraub adds, “I’m comfortable in the scrap business. I’m a junk man at heart, I don’t care how many degrees I have.”

Lesson learned

In addition to continuing to gather metals industry knowledge, Eisner says the role of being a business owner also has required him to learn more about himself.

Eisner says that by his second year in the business it was clear to him he had more to learn about personnel management, delegation and even interpersonal communication with customers. “I contracted with someone in year two because I could see I was the limiting factor—I was the bottleneck,” he remarks. “This career coach helped me embrace a corporate philosophy of communication, trust and accountability.”

He continues, “I looked in the mirror and asked, ‘Where do you want to go, and what’s preventing you from getting there?’ And it was me. Setting up was a solo act, but growing the business would involve teamwork. And you don’t want turnover because it takes too long to train people.

“The team we’ve assembled here operates without conflict, but it takes work. We have off-site retreats,” Eisner says.

In his approach to employees and customers, he says, “I’ll never stand in your way if you think you can improve yourself. Also, don’t be unhappy. Life’s too short. I want all the people I deal with to be happy and to be fulfilled.”

Weintraub, who has known Eisner for more than two decades, says, “I’ve seen him mature as a business person, and it’s really rewarding being able to participate in such a close friend’s growth and success.” Because of the way Eisner manages the company and its employees, Weintraub says, “A significant part of what we do involves personal growth.”

Eisner’s management approach also is appreciated by Campbell, the office manager. “I don’t really know enough about the scrap industry yet,” says Campbell, who began working full time for Premier in December 2013 after a previous part-time stint. “What I do know of the scrap industry is that there are ways to take advantage of people, but Michael won’t do that. It’s not in his nature. He has integrity, and this business, to him, is about doing things the right way.”

Weintraub credits Eisner with several positive traits that have helped Premier Metal grow significantly during its five-year existence. “I know a lot of people who went to top universities and law schools—some very smart people—yet Michael is one of the smartest people I know. He is persistent, creative and he gets tremendous satisfaction from helping others. His thirst for knowledge and growth permeates the company. Life has to be more than just coming to work every day. It is here, and I enjoy it.”

Five years after starting Premier Metal Services, Eisner says he is grateful for the growth the company has experienced as well as for the personal growth that has come along with it.

“It was a slow journey to develop my thinking like this,” he states. “Introspection is a wonderful thing if you’re willing to do it, but it’s not easy, and it’s not easy to change who you are.”

Eisner says his goal is for him and his colleagues to look forward to each day at work. “I enjoy what I do; it’s my hobby. I want to continue to grow my interpersonal skills with everyone here. People are much more effective when they’re happy and when they truly care about where they work. That comes from the top down, and you have to believe in that. Done in an effective manner, it can really build teamwork.”

The author is editor of Recycling Today and can be contacted via email at btaylor@gie.net.

Basket half full

Features - Commodity Focus

An economist with Numera Analytics examines the limitations of North America’s recovered fiber commodities basket.

An important question increasingly being asked in the forestry industry is whether the world is running out of recovered fiber.

Usually two main issues are raised in this regard. One is that recovery rates of scrap paper are maxing out as collectors have already tapped all easily accessible sources of supply. This is particularly true for industrialized nations, where in some cases recovery rates well exceed 90 percent.

The second, and more pressing, affair is that as the production of virgin paper diminishes over time, the quality (and quantity) of secondary fiber also is bound to decline as paper can only be recycled a finite number of times. In the absence of a fresh fiber stream, the strength and quality of the paper collected will gradually diminish.

Both these issues suggest that, in the future, supply-side shortages could arise in regions lacking secure access to virgin pulp.

This, however, is not a problem that afflicts North America. Although the U.S. and Canada register very high recovery rates, both countries have ample fiber baskets and collect significantly higher volumes of scrap paper than locally demanded. This said, short-run shortages are still possible as market conditions are still sensitive to sudden supply and demand variations.

The current state of affairs

Last year, recovered paper consumption in the U.S. and Canada totaled 30 million metric tons. While total usage was slightly higher than in 2012, it was almost 8 million metric tons lower than at the turn of the century. (See Graph 1, below.) Scrap paper use in North America has been declining on a trend basis, contracting in nine of the past 13 years. While exacerbated by the Great Recession, this persistent reduction in secondary fiber usage is fundamentally a consequence of the downfall of the communication paper sector in North America since the emergence of high-speed Internet.

At present, regional consumption of old newspapers and magazines (ONP/OMG) is 4.8 million metric tons lower than it was prior to the dot-com bubble. In fact, close to two-thirds of the overall drop in recovered fiber usage between 2000 and 2013 was accounted for by these two grades. ONP consumption has been primarily affected by falling newsprint consumption resulting from declining newspaper circulation, though substitution with virgin fiber and the closure of some recycled-based newsprint mills also have contributed to the decline.

The importance of these last two factors should not be understated. Last year, ONP consumption in the U.S. and Canada fell 12 percent compared with a 4 percent drop in newsprint production and a 0.7 percent reduction in recycled boxboard manufacturing, its two main end uses. (See Graph 2 below) The decline in ONP consumption, thus, was largely explained by a decrease in the region’s average ONP utilization rate. In the case of newsprint, ONP utilization was weighed down by the closure of Catalyst Paper’s Snowflake mill in Arizona, one of the few remaining facilities in North America running entirely on deinked pulp. For boxboard, in turn, ONP consumption was probably affected by a reduction in the use of ONP as a percentage of total pulp furnish (in detriment of mixed paper or old corrugated containers [OCC]).

With ONP declining sharply, why then did total recovered fiber consumption increase in 2013? Quite simply, because rising demand for OCC compensated for falling usage of ONP and mixed paper (Graph 3, above). OCC consumption in North America has been moving sideways for more than a decade, closely tracking changes in containerboard production. Between 2002 and 2012, consumption of OCC fell at an average rate of 0.3 percent per year, very much in line with total containerboard output (-0.1 percent average annual growth rate [AAGR]). Last year, however, OCC demand expanded 4.6 percent, reaching 19.8 million metric tons by year end.

At first glance, such a sudden increase in OCC deliveries might seem at odds with the North American box market. Regional box shipments edged down 0.2 percent in 2013, curtailed by lackluster growth in nondurable goods manufacturing. With consumption held back by weak corrugated shipments, containerboard demand was primarily sustained by strong inventory accumulation. Liner and medium inventories at U.S. boxplants fell sharply in 2012, prompting converters to replenish their input stocks in 2013 despite sluggish box demand. Rising domestic demand, therefore, supported containerboard production, which increased 1.1 percent.

While representing only 30 percent of overall production, recycled linerboard and medium, together accounting for two-thirds of containerboard’s OCC usage, explained 70 percent of the increase in containerboard output. In both cases, production was buoyed not only by rising demand but also by a series of startups, conversions and capacity upgrades during the spring and summer. The largest of these was the startup of Norampac’s Greenpac mill in Niagara Falls, New York, which at full ramp-up is expected to produce 490,000 metric tons of recycled linerboard. To some extent, then, growth in OCC demand in 2013 was a reflection of forward purchasing by mills with these new containerboard machines, which sought to stock up prior to the startup of commercial production.

But growth in OCC demand was not only driven by rising containerboard production. OCC deliveries exceeded the pace of growth of recycled and virgin-based containerboard. The missing piece of the puzzle was an unfavorable external environment. For the second time in 13 years, OCC shipments to China (by far the largest destination for North American OCC) declined in 2013. According to Chinese customs, OCC imports from North America edged down 5 percent versus 2012, while the U.S. Census Bureau and Statistics Canada reported a 10 percent decline (Graph 4, below).

The key here is that falling OCC imports were fundamentally a reflection of sluggish containerboard production in China as well a consequence of the much-discussed Operation Green Fence. With regard to the former, the China Paper Association (CPA) reported a 1.1 percent drop in containerboard manufacturing in 2013. Industry observers might find this surprising, considering 16 new containerboard machines were brought online during this period. Weak manufacturing activity and the closure of dozens of small and outdated mills by the Ministry of Industry and Information Technology (MIIT) were to blame. OCC imports were further curtailed by Operation Green Fence, a policy initiative by the Chinese government to clamp down on the import of illegal solid waste. The program acted as an indirect tariff barrier, blocking all recovered paper bales that did not meet minimum quality standards. As offshore shipments declined, OCC availability in North America increased, reducing input costs for recycled-fiber-based mills. Thus, despite flat growth in OCC collection, domestic OCC supply rose 4.5 percent in 2013, encouraging mill consumption.

The medium-term outlook

As is by now probably expected, the medium-term prospects for ONP and OCC consumption in North America are strikingly different.

Growth in ONP usage will probably continue to decline, weighed down by falling newsprint shipments. As newspaper circulation declines, the quantity of ONP collected also will drop. In fact, to the extent ONP recovery rates stay constant, the volume of ONP available for domestic consumption probably will decline faster than the quantity demanded. This is because ONP is used not only in newsprint production but also in recycled boxboard manufacturing, a segment that is not facing the same structural woes as newsprint. Thus, as disposable income rises and retail sales pick up, boxboard deliveries probably will increase. This would put upward pressure on ONP prices, prompting recycled boxboard producers to switch to OCC or to mixed paper.

In contrast to the ONP market, growth in OCC consumption throughout the next few years primarily will depend on how corrugated demand responds to future macroeconomic conditions. The U.S. economy is picking up steam after a weak start to the year. According to the Bureau of Economic Analysis (BEA), real GDP in the U.S. grew at an annualized rate of 4 percent in the second quarter of 2014, offsetting the 2.1 percent drop registered during the first three months of the year (Graph 5, below). Job creation, consumer confidence, retail spending and factory output have all been on the rise since April, paving the way for stronger corrugated demand in coming quarters. Rising box production will boost containerboard deliveries, though board demand in 2014 will grow more slowly than in 2013 owing to high box plant inventories. Importantly, most of the increase in containerboard demand throughout the next two years likely will come from the recycled segment, which also will benefit from the conversion of a former newsprint paper machine in Oregon and from the startup of a 327,000-metric-ton mill in Indiana during the second half of 2015.

As containerboard production expands, OCC consumption also will increase, barring a sudden drop in the utilization rate. The question, therefore, is whether enough OCC will be domestically available to meet the containerboard industry’s recovered fiber requirements. This, in turn, will depend on three main variables: the OCC recovery rate, the availability of boxes for collection and net exports of OCC.

The first of these factors offers little room for improvement. The apparent OCC recovery rate in North America (which does not take into account imports of boxed goods) has averaged 94 percent over the past two years, and short-term gains seem unlikely as they would require the introduction of innovative sorting and cleaning technologies. With flat recovery rates, OCC collection only will increase with higher potential supply. Luckily, positive growth in domestic corrugated shipments should result in higher collection levels.

But even if OCC collection rises, what will be left in the domestic market may still decline if external demand is high enough. As mentioned in the previous section, North America exports a large amount of recovered boxes to China, where imported OCC represents about one-third of containerboard furnish. If Chinese containerboard output increases substantially, mills in that country will expand their purchases of imported OCC, potentially putting pressure on North American supply. This is particularly true considering a good portion of North American OCC exported to China is shipped by traders wholly or partly owned by Chinese manufacturers. Thus, even if North American OCC requirements rise, these traders will tend to favor Chinese mills.

Throughout the next two years, we expect Chinese containerboard shipments to grow between 3 and 4 percent per year. The Chinese government is trying to engineer a transition from an export-based, investment-driven economy to one based on private consumption and a more equitable distribution of income. Such a transition, however, could cause the economy to decelerate in the short run as the government seeks to reign in credit growth, reduce industrial overcapacity and control local government debt. Note, however, that even if board demand slows down, recycled-based production still will be supported by the startup of eight new containerboard machines before the end of 2016. While government-sponsored pulp and paper closures might mitigate overall capacity growth moving forward, net capacity additions would still amount to nearly 7 million metric tons. Assuming OCC recovery rates in China remain stable between now and 2016, positive growth in Chinese containerboard production would then call for higher OCC imports from North America. Whether these shortages result will consequently depend on whether OCC collection in Canada and the U.S. is enough to satisfy both domestic and external needs.

What does this all mean? On the supply side, scrap paper collection in North America will increase modestly over time. With record high recovery rates, total collection will depend on the quantity of recoverable paper and board consumed by retailers, wholesalers, factories, offices and households. Here, rising paperboard consumption will be neutralized by falling demand for newspapers, magazines and other graphic papers.

As ONP, OMG and high-grade collection diminishes, newsprint, boxboard and tissue mills will have to look for viable alternatives. Mixed paper consumption therefore could increase in some of these sectors, as could OCC usage by noncontainerboard producers.

An adequate supply of raw material will continue to be available for recycled containerboard mills, though upward price pressures might develop if these consumers face increasing competition from China or from other segments in North America.

The author is an economic analyst primarily responsible for analyzing the containerboard and recovered fiber sectors for Montreal-based Numera Analytics. He can be contacted at jklara@numeraanalytics.com.

Targeted coverage

Features - Conferences & Events

The Italian city of Milan may be known as one of the fashion capitals of Europe, but for two days in late October the city will be home to two concurrent conferences that expose attendees to the perspectives of numerous recycling industry experts who provide a detailed look at the key factors affecting the paper and plastics recycling industries.

The Paper Recycling Conference Europe and the Plastics Recycling Conference Europe, both organized by Richfield, Ohio-based Recycling Today Media Group, the publisher of Recycling Today magazine, and Smithers Pira, based in the U.K., are scheduled for Oct. 29-30. Both conferences provide attendees with a comprehensive look at many of the top issues that are affecting processors and dealers of recycled plastics and paper.

A focused approach

Bill Moore, a principal with Moore & Associates, Atlanta, has been involved in the Paper Recycling Conference Europe since it began 10 years ago. He says growing interest in the paper recycling and plastics recycling sectors warrants separate conferences that target the trends and issues facing paper and plastics recyclers and consumers of these secondary materials.

“Paper recycling remains a large and vibrant business,” Moore says. “Meanwhile, plastics recycling is rapidly growing and is a strong commodity. And there is more of a divide in Europe between paper and plastics recyclers than there is in the U.S.”

While the Paper Recycling Conference Europe introduced some educational sessions on plastics recycling earlier in the decade, trying to provide ample coverage of plastic scrap markets in addition to a valuable venue for paper recyclers was proving to be challenging. Therefore, to satisfy the interests of both paper and plastics recyclers, conference organizers opted to create two separate events—one dedicated exclusively to paper recycling issues, while the other conference addresses topics affecting the plastics recycling sector. Despite being separate events, the two conferences share one exhibition space, which hosts networking breaks and the grand reception that concludes the first day of the conference.

James Keefe, Recycling Today Media Group publisher, says the decision to create two dedicated conferences followed significant feedback from attendees. He says attendees have been expressing great interest in attending conferences that focused on the individual materials rather than trying to cover both recyclables in a generalized event.

“By dedicating each of these conferences to that one particular commodity, we feel we are giving our attendees a much more focused conference, one that provides them with all the information they need to make more informed decisions,” Keefe says.

An enduring commodity

Despite the challenges the paper industry is experiencing, paper is still one of the most recycled commodities. To provide the more than 270 paper recycling industry officials in attendance with valuable insight, conference organizers are bringing some of the top paper and paper recycling companies together to discuss the issues affecting the industry.

Kicking off the Paper Recycling Conference Europe is a panel that examines the state of the industry. Panelists include Per-ove Nordstrom with the consulting firm McKinsey, who provides a macroeconomic look at the paper and paper recycling industries; Marc-Antoine Belthe, the head of recycling for Veolia Proprete France Recycling, who discusses the paper recycling industry from the perspective of one of the largest paper processing firms in Europe; and James Malone, the European sales and purchasing director for U.K.-based DS Smith’s Recycling Division, who outlines the perspective of a European paper mill.

Quality continues to be a concern for paper recyclers and recovered fiber consumers. Conference organizers have assembled a panel to discuss changing quality demands that includes Guillermo Valles with Spain-based recycled paperboard company SAICA, Johannes Kappen with the German research organization PTS and Graham Moore, a paper consultant with Smithers Pira. In addition to looking at trends affecting the industry, the panel discusses changing materials streams, collection programs and quality demands.

Transportation, an important though often overlooked component of the recycling industry, is the theme of another session at the 2014 Paper Recycling Conference Europe. The session, moderated by Ranjit Baxi, managing director of London-based J&H Sales International, includes representatives from container shipping lines, including Maersk, that discuss issues such as freight rates, container availability and consolidation in the container shipping industry.

The second day of the conference begins with a Mill Buyers Panel, which brings together paper mill representatives to discuss the recycling sector from their vantage points as consumers of recovered fiber.

The conference concludes with two sessions that go from global to local. In the penultimate session, a panel of top paper stock exporters discusses the changing export landscape. Topics to be discussed during the session include opportunities in China, new and growing markets for recovered fiber and trends affecting various recovered fiber grades in Europe as well as around the globe.

The 2014 Paper Recycling Conference Europe concludes with a look at the Italian paper and paper recycling industries, the fourth largest in Europe. However, with a purported recycling rate of 63 percent, Italy lags behind Europe’s average recycling rate, which is in excess of 71 percent. This disparity creates opportunities for astute recyclers in the country.

An up and coming commodity

Plastics recycling may not have the history that paper recycling does, but it is a material that holds tremendous upside, generating more interest from recyclers.

To ensure the inaugural Plastics Recycling Conference Europe provides attendees with the most value, conference organizers have assembled an advisory panel of top plastics recycling experts to help guide conference programming. The two-day conference provides attendees with the information they need to succeed in the plastics recycling industry.

The conference opens with an overview of the plastics recycling market in Europe. Speakers at the 90-minute session include Victor Bell, president of Environmental Packaging International, who sketches out pricing dynamics and provides a market overview; Martin Wiesweg, director of Chemical Market Associates, who will outline the global flow of recycled material; and Surendra Borad, chairman of the plastics recycling company Gemini Corp., who will discuss the post-Green Fence world.

Following the opening panel, the conference hosts a session titled Plastics Recycling Dynamics: the Buy-Side Perspective. This session looks at the possibility of delinking recycled plastics markets from the polymer markets and at European legislation affecting plastics recycling. It also features a panel discussion with a number of industry experts.

Other sessions to be covered at the Plastics Recycling Conference Europe include a discussion on some of the top plastic scrap grades, such as HDPE (high-density polyethylene), PET (polyethylene terephthalate), rigid plastics, polystyrene and plastics from electronics and end-of life vehicles; the challenges of recycling versus waste to energy; and expanding opportunities for the plastics supply chain.

The 2014 Plastics Recycling Conference Europe concludes with a strategic panel discussion, where government officials, closed-loop operators, end users, collectors and recyclers gather to discuss the challenges and opportunities for the plastics recycling sector in Europe.

All together

Along with the two days of educational sessions, the two conferences share exhibit space, which also hosts networking breaks and a grand reception.

Finally, just because the two conferences have been built around providing insightful, valuable information that doesn’t mean attendees won’t have the opportunity to explore Milan in their free time. The events are held at the Milan Marriott Hotel in the heart of this metropolitan city. The location allows conference attendees easy access to many of the top destinations in this vibrant city.

The author is senior editor of Recycling Today and can be contacted through email at dsandoval@gie.net.

Looking for direction

Features - International Recycling News

Trading throughout countries that are part of Eastern Europe continues to be fraught with challenges, the current political situation notwithstanding.

The trade of scrap metals to and from many eastern countries that are part of the European Union (EU) continues to be complicated for a variety of reasons. Besides the fact that the region continues to emerge from a prolonged recession, transport issues also concern traders.

Some Eastern European nations, having joined the EU in more recent years, are concerned about the import of scrap, lumped in as “waste,” to prevent dumping.

Overly strict adherence to the EU’s policy on transboundary shipments of waste also has been cited as a major concern.

Meanwhile, non-EU countries, such as Russia, the Ukraine and Belarus, have imposed restrictive export duties or taxes on various scrap metals for years.

Escalating geopolitical tensions in Ukraine have only added to the struggles, interfering with shipping routes.

Trade restrictions

Robert Voss, chairman of the Bureau of International Recycling’s (BIR’s) International Trade Council and CEO of the U.K.-based trading firm Voss International, says, while an abundance of scrap metals are being traded among EU countries, difficulties also are creating concern.

Countries such as Slovakia, Hungary and Romania, now part of the European Union, should be contributing to the free flow of materials intended to exist in the EU. However, Voss says that’s not always the case, as there are varied interpretations of the EU trade legislation governing the shipment of “waste” materials.

“A lot of what is happening now is that some of the old Eastern Bloc countries are making life as difficult as possible for exporters out of the EU,” says Voss. “For example, they may be stopping materials at ports and instigating ridiculous checks, sometimes holding containers up for months and months, without hardly any excuse.” Voss says the checks may result in finding frivolous errors in documentation that are used to inflict fines.

“Their interpretation of the legislation is, in my opinion, far too stringent,” he says. “We are all governed by the legislation written out of Brussels, but it’s open to the interpretation of the sovereign states, and some of them are being far too punitive.”

He refers to the EU regulation regarding the transfrontier shipment of waste, which includes scrap metals. Because some countries interpret the law too strictly, he says, moving goods across or through borders can be tricky. If the load gets stopped and an error or problem is found, it can take months for the containers to be returned, and exporters can be hit with hefty fines, Voss says.

“When you’re crossing borders, you take the chance that one country involved may restrict the export of the materials. Therefore, it’s no longer a free-trade zone, and it becomes a risk,” he explains.

While Voss says the problem seems to be isolated presently, exporters have become increasingly concerned, particularly when shipping longer distances.

One recycling industry executive who is concerned about transboundary shipments of scrap is Jeffrey Kimball, commercial director of Loacker Recycling Group’s Hungary office in Budapest. Kimball refers to the EU Shipment Regulation’s Annex VII requirements designed to track waste, including scrap metals, that is shipped among EU countries.

“It’s supposed to help environmental agencies track shipments of waste, but unfortunately they’re devoting a lot of resources ‘tracking’ absolutely harmless waste shipments,” he says. “We have a lot of reporting overlap in our industry.”

Kimball explains that in addition to monthly reporting by product and by country to the EU, various local authorities also request similar information. He says he believes that government agencies should coordinate these reporting requirements and, instead of tracking millions of tons per year of raw materials used by industry, concentrate their energies on issues surrounding problematic waste arisings, shipments and illegal disposals.

“As all member states collect the data differently, the efficiency of the current Annex VII accompanying document is questionable,” Kimball says. “When we have to put all source and end-user details on a document which accompanies the goods, it’s an administrative barrier and a breach of commercial secrecy. Every party to the transaction has full access to proprietary commercial information.”

Kimball says he believes Hungary’s environmental ministry has unfortunately begun to see the documentation as a source of revenue. “One ‘mistake’ on the Annex VII—unfortunately every member state has its own interpretation of proper filing—and the shipment is stopped at the border until the issue is settled and/or a fine is paid,” he says. “I have personally heard about trucks blocked for several months,” Kimball adds.

Another barrier, he says, is tighter control of metal flows prompted by metals theft. Kimball refers to the mandated daily reporting that all metal traders active in Hungary are required to provide to Hungarian customs authorities on every single transaction as an administrative burden that also can lead to delays and fines. “It’s a bit intrusive, but I hope some good is coming of it,” he says.

Finally, Kimball refers to import restrictions that continue to be in place in countries such as Romania and Bulgaria, which joined the EU more recently. The barriers were intended to prevent the import or dumping of waste to the countries’ landfills, he says, but they also unwittingly affect scrap metals.

“Every shipment of waste including scrap metal has to be registered and handled almost like hazardous waste in order to import it,” says Kimball.

These requirements continue for the time being in places such as Bulgaria and Latvia, though some requirements are scheduled to be removed at the end of 2014 (Bulgaria) and late 2015 (Romania).

At the moment, according to Kimball, “This for them is a real barrier to trade because it hinders local industry and local smelters.” Consumers in those countries working to source metals abroad have to go through dramatic administrative hurdles that can take months, he adds.

Slowly changing

The current political tensions in the region notwithstanding, Eastern European countries that are not part of the EU continue to pose trading challenges.

Voss says Ukraine is a bit of a no-go area at the moment, while countries such as Kazakhstan, Belarus and Azerbaijan continue to uphold export restrictions on scrap.

“There’s still a significant ban on exports, which seems to be Russian-led, and it seems to be growing,” says Voss.

Russia has had restrictive export duties on various scrap metals for several years.

Björn Grufman, president of the BIR and also CEO of Sweden’s Metallvarden AB, says, while Russia is reducing its export duties, its domestic scrap prices have been above European levels. He explains that most of Russia’s exports of ferrous scrap are traditionally shipped through the Black Sea to Turkey. But with shipping routes likely hampered by tensions in the region, these exports also may have suffered by as much as 40 percent Grufman suggests.

However, the current crisis in Ukraine hasn’t seemed to change trading patterns to the rest of Europe, traders say.

“From what we’re seeing in Eastern Europe, the Ukraine situation doesn’t affect us that much,” says Kimball. “Trade between Ukraine and neighboring countries is virtually zero,” he says. “It’s been this way for some time.”

Michael Schneider, press officer for Remondis in Germany says the company’s business efforts in the Ukraine and Russia were less than stellar even before the current political crisis.

One problem, he says, has been reliability of doing business in some regions. “You can’t really be sure if the contract you signed two years ago will still be valid today,” he says.

Remondis trades scrap metals as well as plastics and paper scrap. Schneider says in recent years the company has retreated from its business interests in Russia and the Ukraine to some degree.

He adds, “It’s a difficult business.” Schneider says the company originally had higher hopes for the strengths of these markets since it entered them in the early 1990s. “It turned out they are not in much hurry to switch from a landfill-based waste management to recycling,” he says of Russia.

In the Ukraine, the idea of extracting raw materials from waste is slightly more attractive because the region is lacking in these natural resources, Schneider adds.

Economic differences

Voss says Eastern European nations vary widely in terms of economic prosperity and this has been evident in the scrap business to some extent.

Poland is a key example, with its fairly strong consumer market. Both Grufman and Voss say the nation on the whole is a significant buyer of copper scrap. Kimball says the country also has been a healthy buyer of aluminum scrap in the last couple of years, though the pace has slowed in recent months.

Grufman points to Poland and the Czech Republic as two of the strongest countries in the region in economic terms, particularly in comparison with western nations such as Italy, Spain and Greece. “They have very little domestic demand, and they have problems with what they believe is a strong euro that makes it difficult to export to other countries,” he says of these western nations.

Nonferrous scrap availability throughout Eastern Europe continues to be referred to as tight or limited, similar to what has been seen throughout the rest of the world.

Voss says with most of Europe still in recovery mode, margins continue to be squeezed and traders are fighting for the same metal. Voss says, while prices are at reasonable levels, “I just think there’s not a lot of scrap being produced.”

Grufman also describes scrap availability as limited and refers to persistent processing overcapacity in many regions, including Poland and the Czech Republic. “There is overcapacity all over the place, and they are not reducing that capacity fast enough to get back to normal margins,” he says.

For his part, Kimball says Loacker’s exports from Hungary have been stable over the past several years. The Austrian-based company now has three scrap yards in Hungary and one in Slovakia, plus dozens of others in Southern Germany, Austria and Switzerland. He says Hungary is a net exporter of everything except primary grade aluminum scrap, which is typically consumed internally. Kimball says the country on the whole exports around 1 million metric tons of ferrous scrap and about 25,000 metric tons of copper scrap annually, the majority of which remains within the EU. Most of Hungary’s ferrous scrap is exported to Italy, followed by Austria, Slovenia, Slovakia and, more recently, Turkey.

In fact, Kimball says, while scrap metals flows from Hungary haven’t changed much recently, Turkey’s entrance as a buyer a few years back was a noticeable change. “Back then it was really exotic. Now,” he says, “it’s an everyday event.”

The author is an editor with the Recycling Today Media Group and can be reached at lmckenna@gie.net.

Abandonment issues

Features - Electronics Recycling

The stockpiling of old cathode ray tube (CRT) monitors and TVs may be tied to opportunism, poor planning and a lack of processing capacity.

Several states in the U.S. have passed laws to prohibit TVs and computer monitors with cathode ray tube (CRT) technology from entering landfills. The devices, which contain leaded glass as well as trace amounts of other potentially toxic metals, pose a threat to the soil and groundwater near landfills, especially if they breach the landfill’s lining in the future.

To spur collection of CRT devices at the end of their lives, many states have put in place programs that offer incentives to companies that collect old monitors and TVs as a way of ensuring these devices are diverted from landfills.

In addition, the electronics recycling sector has assumed somewhat of a “gold rush” aspect for the past several years, as entrepreneurs have streamed into the segment to harvest refurbishable machines, resalable components, precious metals, nonferrous metals and recyclable plastics contained in obsolete electronics.

The combination of state systems and private sector enthusiasm has raised the diversion rate of old CRT devices in recent years. For the most part, these devices have progressed through well-traveled channels to proper end-of-life recycling methods or to disposal.

Within the past two years, however, several cases of abandoned CRT monitors have been discovered, prompting debate over whether the CRT recycling market as configured contains fundamental flaws.

Home and away

A decade ago, much of the debate surrounding end-of-life CRT monitor disposition focused on unsafe and environmentally unsound recycling practices taking place overseas.

The Basel Action Network (BAN), Seattle, has had among its foremost missions the enactment and enforcement of the export ban for nonworking monitors from OECD (Organization of Economic Cooperation and Development) nations to non-OECD nations. BAN was a key player in exposing unsafe and hazardous recycling of monitors and TVs in Guiyu, China, in 2001. Many of those monitors and TVs bore identification tags tracing them to the United States.

The export issue remains part of the debate to BAN and other organizations but also has a domestic counterpart in the form of abandoned stockpiles of CRT devices in the U.S.

Longer journeys for a longer life cycle

The video Exporting Harm, released by the Seattle-based Basel Action Network (BAN) in 2002, displayed a litany of bad environmental and worker safety practices taking place in Guiyu, China, in the recycling of obsolete electronics and electrical transformers.

BAN subsequently pointed to Guiyu as a reason why obsolete electronics should not be shipped from developed OECD (Organization for Economic Cooperation and Development) nations to non-OECD nations.

However, a faction of electronics recyclers was quick to object to the proposed ban, saying repaired and repairable computers were helping to connect the developing world (including school children) to the Internet and were providing technical skills and entrepreneurial opportunities to technicians and recyclers in developing nations.

The debate has included the use of statistics by each side to back up its support for or opposition to an export ban.

The summary findings of the 2002 54-page Exporting Harm report includes this statement: “Millions of pounds of electronic waste from obsolete computers and TVs are being generated in the U.S. each year and huge amounts—an estimated 50 percent to 80 percent collected for recycling—are being exported.” BAN cites “informed recycling industry sources” for the 50 percent to 80 percent estimate.

Two studies cited by the Institute of Scrap Recycling Industries Inc. (ISRI) on its website, www.isri.org, examine whether trade statistics show that the U.S. is flooding developing nations with used electronics, as portrayed by BAN.

The February 2013 U.S. International Trade Commission (USITC) study, “Used Electronic Products: An Examination of U.S. Exports,” is billed by ISRI as “the most comprehensive report on the collection and export of used electronics products (UEPs).”

The study found that more than 80 percent of the UEPs collected in the U.S. were recycled, reused or refurbished domestically while 17 percent of such items were sent for export, says ISRI. “A subsequent report released by the Massachusetts Institute of Technology (MIT) Materials Systems Laboratory and the U.S. National Center for Electronics Recycling (NCER) in 2013 indicates that more than 90 percent of used electronics collected for recycling within the U.S. remain in the U.S. for processing and are not exported,” adds ISRI.

More recently, Robin Ingenthron of Good Point Recycling, Middlebury, Vermont, says Basel Convention auditors themselves have helped demonstrate that the global used electronics trade is a viable and honest one.

“Seized container loads were studied by independent Basel Convention-funded auditors and found 91 percent reuse rates,” says Ingenthron, who says this level of working order is “better than [that of] brand new product sold there.”

Ingenthron adds, “If avoided recycling costs were really the driver, you would see televisions, not 17-inch CRT monitors, exported to Asia.” He says the purpose of shipping the monitors clearly is to resell them, not to dump them.

Media reports from July 2013 to April 2014 pointed to the discovery of stockpiled CRT devices in Arizona, Colorado, Maryland, North Carolina, Ohio and other states. Additionally, a sizable soil cleanup project in Arizona is tied to stockpiles of crushed CRT glass produced from monitors collected in California.

Electronics recyclers and NGOs (nongovernment organizations), such as BAN have differing opinions about the causes of the current state of the CRT recycling market and, likewise, offer different suggestions as to how to improve the situation. There is, however, widespread agreement about two things:

there is room for improvement in how monitors are handled currently; and

the decline in CRT technology use is likely to make profitable recycling even more difficult in the future.

Among the sources of disagreement, a major one remains the role of developing (non-OECD) nations as users of repairable and remarketable CRT monitors. BAN remains concerned that non-OECD nations are being taken advantage of as “dumping grounds” for nonworking monitors, while another sector of traders and recyclers says it has data on its side to show that what non-OECD nations receive is usable and wanted by consumers there. (See the sidebar “Longer journeys for a longer life cycle,” opposite page.)

Although BAN continues to largely oppose the exporting of used electronics to prolong the life of monitors, it has begun to offer its e-Stewards certification to recyclers in other nations. The other major certification program, R2 (Responsible Recycling Practices), made its certification program available to overseas recyclers earlier this decade.

Another source of disagreement is the role of state programs that compensate companies that collect CRT monitors without necessarily ensuring the incentive also exists to send these monitors to processors.

Government critics point to such porgram shortfalls, while the private sector may have a stockpiling problem of its own. According to several sources, many small, entrepreneurial electronics recyclers have accepted monitors along with more desirable items to retain customers. However, once these recyclers have the monitors, they have no profitable way to move them along the processing chain.

Capacity claims

As a number of warehouses full of monitors have been discovered in the U.S. in the past 18 months, one of the logical questions to ask is whether it may be a case of insufficient processing capacity for declining CRT technology.

“Leaded silicate can be recycled at copper smelters as well as [at] lead smelters,” says Robin Ingenthron of Good Point Recycling, Middlebury, Vermont.

Jim Puckett, executive director of BAN, says, “We believe that [processing] capacity is not exhausted currently, but it could be if all warehousing were stopped tomorrow.”

Finland-based multinational recycling firm Kuusakoski has opened a CRT recycling facility in Illinois based in part on the premise that new processing capacity is needed in North America. A white paper prepared by engineering firm CB&I, The Woodlands, Texas, shows “there is a capacity and cost issue specifically for CRT glass recycling,” says Anssi Takala of Kuusakoski.

“At a capacity of approximately 128,000 tons per year, existing facilities are able to manage only 60 percent of the CRT glass recovered annually,” the report states. “With an estimated 206,000 tons of CRT glass requiring management annually, there is an existing, immediate market shortfall of 78,000 tons per year, which may explain recent reports of the stockpiling of CRTs.”

The CB&I report contends the future may bring even greater capacity restrictions. “Of additional concern is the future availability of capacity at existing facilities. The [Videocon] facility in Mexico is currently the largest handler of CRT glass, representing 80 percent of existing capacity. Industry experts believe that facility will cease serving as an end market by 2016, and possibly as soon as 2014, which would severely challenge CRT management by [electronic scrap recyclers].”

The figures used by CB&I refer to recycling applications tied to the production of new CRT glass as well as to smelting operations that currently accept limited numbers of monitors.

Agreement on what constitutes the legitimate recycling of CRT devices leads to another debate within the electronics recycling sector. When an old monitor is collected, the number of routes it can take (repair, export, dismantling, smelting, etc.) lead to some outcomes that may be considered desirable recycling by one faction but not by others.

Highest value

As pointed out by the CB&I white paper, the decline in manufacturing of new CRT monitors in North America has placed a ceiling on the closed-loop recycling capacity for end-of-life monitors.

One such remaining plant in North America is operated by India’s Videocon in Mexicali, Mexico. Ohio-based Dlubak Glass also processes monitor glass, and U.K.-based Nulife Glass opened a CRT glass recycling plant in Dunkirk, New York, in 2013.

Many of the other recycling options do not enjoy widespread support from BAN and other recycling advocates.

The Kuusakoski process in Illinois converts processed monitor glass into a landfill alternative daily cover (ADC), an outcome not markedly different from entering the landfill, according to BAN. “The e-Stewards program has designated that cleaned CRT glass that passes the TCLP (toxicity characteristic leaching procedure) leachate test is acceptable to use for landfill disposal if all other avenues are closed and it is truly a last resort,” says Puckett.

“Currently no company has been able to convince us of this being necessary as a last resort. Unless a company can show this, then they will not be able to complete their program of having all of their sites certified to e-Stewards,” he adds.

An electronics recycler who preferred to remain anonymous says, “My rationale for being opposed to the Kuusakoski process is that the process to collect the CRTs is energy intensive and requires effort, as does the disassembly, cutting into the funnel and panel and cleaning and sizing the material. Once you have the glass in the end state, ready to be recycled, it makes no sense environmentally to put a coating on the cullet and disperse it in thin layers with garbage. It becomes unrecoverable in the future. At the same time they want to bury leaded glass, people are still mining for ore that has lower concentrations of lead than what is present in the funnel. It is insanity.”

Another nonclosed-loop recycler of monitor glass is Global Environmental Services (GES), Austin, Texas. The company crushes CRT monitor glass and “stabilizes the lead content to a minimal percentage,” says Kevin Czachow, GES managing director of sales and marketing.

According to GES President and CEO Kenny Gravitt, the resulting sandlike material is most commonly used in golf course bunkers or sand traps. “We also have a paving company that uses it,” says Gravitt, “but we sent off our glass samples to the PGA (Professional Golfers’ Association) who approved it. So it goes from CRT monitor to sand trap material.”

Gravitt adds, “We do have an applicable solution to the problem that is very simple and very efficient.

“Our lead content is really low,” he adds, saying GES has TCLP test results that stand up to scrutiny.

Less volume, more difficulty

As CRT technology has lost market share to plasma, LCD and LED screens, it has created several difficulties for recyclers.

“It is difficult to justify large-scale CRT recycling processes unless they have another similar application to justify the build costs,” says Puckett.

“The smart states, like Massachusetts and Vermont, started recycling CRTs more than a decade ago when there were still glass-to-glass markets and CRT reuse markets,” says Ingenthron. “States that waited until recently to start collecting will have a much more difficult time.”

Data collected in the U.K. by the Department of Business, Innovation and Skills (BIS) and circulated by Scotland-based Electrical Waste Recycling Group show a drop in CRT monitor collection underway in that nation that may indicate a similar pattern in the U.S.

“The volume of CRT display units is rapidly decreasing and currently stands at 216,945 units entering the waste stream each month,” says Rebecca Patterson of the Electrical Waste Recycling Group. “However, this is predicted to stand at 152,778 units per month by the end of 2014.”

Gravitt acknowledges the change in monitor technology means his feedstock will eventually dwindle, but he sees it as a distant issue. “The production of [new] CRTs has dropped, but over the last two decades they have just inundated the [market],” he says of old CRT devices. “I personally don’t see [the collection of old CRT monitors] going anywhere for another decade. I think there is more out there than what we want. They are sitting in warehouses, and people are looking at them and shaking their heads.”

He adds, “I’d have never invested in this model if it was a short-term goal.”

The eventual shrinking market for obsolete CRT monitors provides yet one more point of discussion between policymakers and recycling advocates who want to ensure such monitors are handled properly and the recyclers who will be called on to make it happen.

The author is the editor of Recycling Today and can be reached at btaylor@gie.net.